AN OFFER by Trans World Airlines to trade half its dollars 1.8bn debt for more shares in the troubled carrier received a cool reception from its creditors yesterday, making it increasingly likely TWA will be forced once again into bankruptcy.

On Tuesday, the airline asked holders of its preferred shares - who already control 55 per cent of the equity - to forgo about dollars 800m in exchange for an additional 15 per cent stake. That stake would come at the expense of TWA's employees, who now own the remaining 45 per cent of their beleaguered employer. The plan is designed to save TWA about dollars 80m a year in interest payments, and comes after the airline's employees agreed to contracts that will reduce operating costs by dollars 250m annually.

Lessors would also be asked for a six-month moratorium on lease payments, for a saving of another dollars 86m.

TWA said that the combination of labour and interest savings would allow it to produce a profit of about dollars 67m next year, and double that in 1996.

However, junk bond analysts argued yesterday that the preferred shareholders, whose notes are backed by assets such as aircraft and engines, may fare better if TWA is forced back into the US bankruptcy court - where it has spent much of the 1990s.

The exchange offer requires the approval of more than two-thirds of TWA's creditors, and at least one big lender yesterday indicated its opposition to the proposal.

Industry executives argue that another round of restructuring by TWA, a proud pioneer of international air travel, could end in liquidation.

TWA, the object of a disastrous 1985 leveraged buyout by entrepreneur Carl Icahn, emerged from bankruptcy only last November. But competition in US air travel has cut margins razor-thin, and the airline has been unable to cover the dividend on its preferred shares.

It reported a loss of dollars 205m in the first half of this year.